Senator Chuck Schumer (D-NY) will wake up to a nasty surprise in the form of a four-page New York Times examination of his record vis-a-vis Wall Street regulations and the Street’s generous donations to Schumer and the Schumer-run DSCC. It’s a hit-piece, no doubt, but it exposes Schumer’s short-sightedness and parochial interests. It also raises larger questions of the Democratic Party’s future, now that they represent almost everyone that works in the financial sector…from Boston to Charlotte.
One segment in particular exposes Schumer’s culpability and avoidance of responsibility:
For Mr. Schumer, Wall Street’s crisis has been especially painful to watch. “It is horrible, just awful,” he said in the interview. “And it affects everybody.”
And he has already begun identifying those he faults for the devastation. Subprime lenders top the list, but he has lashed out with particular fury at the credit-rating industry, which he once defended but now says misled him and the investing public.
“The work at these ratings firms was severely compromised, and the companies were some of the biggest contributors to the current financial crisis [Ed note: and Schumer’s campaign],” Mr. Schumer said earlier this month in response to an S.E.C. move that same day to tighten control over the agencies. “The lesson from this is that the three major firms’ stranglehold on the ratings industry must be loosened.”
[Ed note: this is risible considering that Schumer told SEC Chairman Chris Cox at a 2006 Banking Hearing, ““They’ve implemented their [voluntary] codes of conduct. They’re making good-faith efforts.”]
Mr. Schumer has also blamed the Bush administration for its push to ease rules. “After eight years of deregulatory zeal by the Bush administration [Ed note: and Schumer], an attitude of ‘the market can do no wrong’ has led it down a short path to economic recession,” Mr. Schumer said on the Senate floor in September.
He has not assigned responsibility to himself or fellow Democrats, saying he had no way of knowing of the misdeeds going on on Wall Street. “I wish I was omniscient,” he said. “I’m not.”
[Ed note: he merely had to heed the testimony he heard in Banking Committee hearings, including from Republican SEC Chairman Chris Cox.]
The article credits Schumer with impressive fundraising ability that led to a 50% increase in Wall Street donations over the course of his time as chair of the DSCC. Yet, Schumer cannot take all the credit. Wall Street was reacting not only to the ineptness of the Republican-led administration, but to the Democratic takeover of Congress and the likelihood of a future Obama administration. They were hedging their bets and placing them where they had the best chances of paying off.
We also cannot discount the profound cultural alienation between the average base Republican voter, whose interests were so scrupulously looked after by Karl Rove, and your average Greenwich, Connecticut investment banker. Nowhere has the Republican Party lost more ground in the Bush years than in the tony suburbs of New York City and other East Coast financial centers. The New Democratic Party represents both Wall Street and the unionized autoworkers.
It’s a tension that is well-represented in the person of Chuck Schumer. It will also be represented by a host of newly-elected suburban Democrats.
